City of Austin — all green?

The city of Austin will buy all the green power its municipally-owned utility couldn’t sell to customers, making it the first “green energy only municipal operation,” according to the Austin American-Statesman.

Going “all green” will cost the city government $8.5 million this year, the Statesman reports, but is a “key first step in the city’s Climate Protection Plan.”

The move also solves another problem: Austin Energy has been unable to convince ratepayers to buy its more expensive wind power as part of its Green Choice program. Now the city will buy it instead.

In 2008, AE purchased an inexpensive batch of wind power, which sold out quickly to customers looking to put their money where their ideals were and go greener. At one point, Green Choice customers were actually paying less than those buying AE’s regular mix of power.

But as demand for wind power rose, so did prices, and only a quarter of AE’s last batch sold. The utility first spread the cost to all its remaining customers, but now that additional cost will be picked up by the city government.

The additional costs should go down over time, AE’s general manager says.

From the Statesman story: “Although the wind power the city will be buying will cost about $8.5 million more this year than the standard mix, that difference will shrink to $3 million by 2021, according to Austin Energy estimates that Weis said are conservative.

Weis said West Texas wind might be cheaper by 2021 because coal and natural gas prices will rise over the next decade, particularly if the federal government imposes a tax on carbon emissions.”

The story also notes that the city will run on green power only on paper. In reality, if the wind isn’t blowing, electrons from other sources, including the South Texas Project nuclear plant and the Fayette coal plant, will be tapped.

Still, environmentalists hailed the move, relieved that Austin, which recently seemed to be losing its place as a leader in all things clean and green — including to CPS Energy, which has been making major investments in solar — has moved to take the mantle back.